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Service Sector Activity Growth Slows Down To A 6-Month Low In March


India's service sector activity slowed down to a 6-month low in March from lower expansion in new work, causing weakest hiring since last September.

The monthly computed Nikkei India Services Business Activity Index dropped to 52 in March 2019 from 52.5 in the month before, its lowest expansion since September 2018.

Service Sector Activity Growth Slows Down To A 6-Month Low In March

An above 50-mark in the index indicates expansion while lower than 50 denotes contraction. The services PMI has remained in the expansion territory for the tenth straight month.

Meanwhile, the year-ahead outlook strengthened for the second month in a row. Business expectations (which is a part of the survey), has improved, indicating that companies in the service sector are hopeful that the conditions will improve in the months to come. However, the pace of job creation has not been convincing enough to hope for a higher growth gear.

The Composite PMI Output Index, that takes both services and manufacturing industry into account, lowered to 52.7 in March from 53.8 in February.

"Digging deeper into the anecdotal evidence provided by surveyed firms, there are concerns about delayed payment from clients and a challenging economic situation," said Pollyanna De Lima, Principal Economist at IHS Markit, author of the report.

Firms commented that successful marketing efforts and greater demand underpinned the rise in sales, but some noted that an increasingly competitive environment acted as a brake on growth.

Story first published: Thursday, April 4, 2019, 11:50 [IST]
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